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DUBAI: Energy security and the green transition must go hand in hand if the world is to address the climate crisis, experts participating in a panel discussion at the World Government Summit in Dubai said on Monday.
As Western governments respond to Russia’s invasion of Ukraine by imposing a raft of stringent sanctions on Moscow’s financial infrastructure and vast hydrocarbon economy, European nations have been left casting around for alternative sources of energy.
At the same time, governments urgently need short-term solutions to meet domestic energy demands until renewables like wind and solar can be scaled up. The result is a dual-crisis of energy security and creeping climate catastrophe.
During a summit session titled “Meeting the 2022 challenge: Will energy security derail the energy transition?” organized as part of the Atlantic Council Global Energy Forum, the panel discussed ways in which countries can shift their energy priorities to meet these challenges.
Claudio Descalzi, CEO of Emirates National Investment, who was on Monday’s panel, said African energy producers could offer European nations the energy security solutions they need as the continent weans itself off Russian oil and gas.
“We don’t have our own energy so we never thought about a strategy on energy security,” said Descalzi. “When you don’t have something like that to think about, (how) can you cope with the future? Africa is a good opportunity because they need development, we need gas, and that is a good combination.”
Indeed, buying from a region of the world in dire need of investment to assist its development has an obvious social value, but arguably does little to further the transition away from fossil fuels.
However, Majid Jafar, CEO of Crescent Petroleum, argues that energy security and energy transition do not need to be as mutually exclusive as they are so often depicted.
In fact, there can be no energy transition without energy security and affordability, he told the panel. In that context, the focus has been too much on starving supply and investment in oil and gas in an attempt to solve the climate crisis, while demand keeps soaring.
“It’s as ridiculous as trying to solve obesity by starving funding to sugar and wheat farmers, and not making any changes in diets or policies on how food is consumed,” said Jafar. “Climate change is fundamentally a consumption issue.”
Starving the developing world’s oil and gas industry of investment may actually be hindering the long-term transition to renewables, said Jafar, and “platitudes and prescriptions” from Western governments doled out to Africa and Asia do little to address their actual needs.
Indeed, almost 1 billion people worldwide still do not have access to electricity — a figure made worse over the course of the COVID-19 pandemic. Meanwhile, some 3 billion people do not have access to clean cooking solutions, forcing them to rely on dangerous and polluting sources of heat.
As an indication of the inequality around responsibility for carbon emission, around 80 percent of the global population is yet to board a plane.
“It’s like saying: ‘You don’t need stable grid power like we have, and you can make do with a solar panel on a battery,’” said Jafar.
In search of cheaper energy solutions, many developing countries have been forced to reach for even more damaging fuel sources.
“What has happened is there has been more burning of coal, so you have more emissions and higher energy prices,” said Jafar. “So this issue of underinvestment has been key and it cannot just be that we need more oil and gas in the short-term.”
The oil and gas industry is a long-term business, which requires hundreds of billions of dollars of investment in order to make production cleaner, said Jafar. He also believes these hydrocarbon products will be used differently in future.
“Gas is a fundamental enabler of renewables because it backs it up and it’s the path to future technologies like hydrogen, and oil is used for solar panels and wind turbines,” he said.
“That message of the ongoing need for oil and gas hasn’t been understood, especially in Western markets.”
Indeed, hydrogen is being widely touted as the missing link in the green energy transition. Speaking on Monday’s panel, Anna Shpitsberg, deputy assistant secretary for energy transformation at the US State Department, described hydrogen as a game-changing technology that speaks to a variety of different sources thanks to its ability to underpin nuclear, gas and renewables.
“That’s why we are putting billions of dollars into hydrogen research and development,” she said.
“It cannot always be about putting new infrastructure. We often talk about energy access and how countries sometimes need to build infrastructure, but they also have underutilized infrastructure, and we don’t want them to have debt when they are not even using what they have.”
The path to decarbonization needs to be realistic, efficient, and complemented by the development of new technologies to help bring down the cost of renewables, she added.
In the meantime, the world’s biggest oil and gas producers are committed to maintaining energy market stability. Saudi Arabia, the UAE, and Kuwait have all set aside spare capacity worth an estimated $500 billion, according to Fahad Al-Ajlan, president of the King Abdullah Petroleum Studies and Research Center in Saudi Arabia.
“They had the long-term vision of saying that if there is a disruption in demand or a hiccup in the global oil supply, then there is a way of compensating for that,” Al-Ajlan told the panel. “But if we can talk about energy security, it’s not new.”
Al-Ajlan highlighted the recent missile and drone attacks on Saudi Arabia and the UAE’s hydrocarbon infrastructure by Yemen’s Houthis and the need to pay special attention to energy security. All the while, cutting carbon emissions must remain a top priority.
“We are not achieving our climate goals tomorrow or in the next two years, yet our policy looks like it is,” he said. “We should be very focused on emissions and how to reduce them.”
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